BB Societe BIC SA

BIC Group - Press Release
Clichy - 01 August 2018
               

First half 2018 Results

Challenging Trading Environment - 2018 Outlook unchanged

• H1 Net Sales:  959.3 million euros, down 1.9% on a comparative basis:

• Challenging market and business environment
• Continued solid performance in Eastern Europe
• Soft Second Quarter performance in U.S. Lighters, as expected

• H1 Normalized Income From Operation margin:  19.6%, down 70 basis points: 
  • H1 favorable Cost of Production offsetting increase in Raw Materials and Depreciation
  • Continued targeted investments in Brand Support and Operations
• 68.7 million euros of Goodwill Impairment on Cello (India) as a result of lower growth perspectives in both domestic and export sales.
• Solid Operating Cashflow generation

"Faced with market headwinds in the first half, we continued to invest in our business and drive operational effectiveness, thus enabling us to seize opportunities to deliver future growth.

In the balance of the year, we expect Net Sales growth across all categories. We will deliver solid growth in e-commerce in US Stationery, strengthen our distribution in Lighters, while new product launches will drive Shavers' performance.

Our outlook for the full year is unchanged. We remain focused on delivering on our goals and leveraging the value of our brand as we continue to engage effectively with our consumers."

Gonzalve Bich, Chief Executive Officer

As of January 1, 2018, the BIC Group has applied the following IFRS standards:

• IFRS15 "Revenue from Contracts with Customers." 2017 financial data has been restated
• IFRS 9 "Financial instruments,"
• IFRS 16 "Leases" has been early adopted.
  

H1 2018 Net Sales totaled 959.3 million euros, down 10.5% as reported and down 1.9% on a comparative basis. The unfavorable impact of currency fluctuations (-7.4%) was mainly due to the depreciation of the U.S. dollar and Brazilian real against the euro. Europe grew by 0.8% on a comparative basis. North America and Developing Markets declined by 0.5% and by 6.3%, respectively.

H1 2018 Gross Profit margin was 52.9%, compared to 52.3% in H1 2017.

H1 2018 Normalized IFO was 188.2 million euros compared to 218.2 million euros in H1 2017, with Normalized IFO margin of 19.6% vs. 20.3% in H1 2017.

Income before tax was at 125.3 million euros, compared to 193.6 million euros in H1 2017. Net finance revenue was 5.8 million euros compared to nil in H1 2017. H1 2018 was positively impacted, particularly in Q2, by fair value adjustments to financial assets denominated in USD when compared to December 2017.

H1 2018 Net income Group Share was 70.8 million euros, a 45.0% drop as reported (139.5 million euros, increasing 8.4%, before the Cello goodwill impairment). The effective tax rate was 43.5% and 28.1% excluding the impact of Cello goodwill impairment. Q2 2018 Net Income Group Share was 22.2 million euros and would have been 90.9 million euros excluding Cello goodwill impairment.

EPS Group share was 1.55 euros, compared to 2.76 euros in H1 2017, i.e., down by 43.8%. Normalized H1 EPS Group share decreased 5.0% to 3.05 euros, compared to 3.21 euros in H1 2017. EPS Group Share in Q2 2018 was 0.49 euros compared to 1.70 euros in Q2 2017, down 71.2%. Normalized Q2 EPS Group share decreased 2.5% to 1.99 euros, compared to 2.04 euros in Q2 2017.

At the end of June 2018, the Group's net cash position stood at 55.1 million euros.

Net cash from operating activities was +83.1 million euros, including +197.7 million euros in operating cash flow. The negative 114.6 million euros change in working capital, and others was mainly driven by accounts receivables and inventory increased when compared to December 2017 mainly due to seasonality. Net cash was also negatively impacted by investments in CAPEX as well as the dividend payments and share buybacks.

• Ordinary dividend of 3.45 euros per share paid in May 2018.
• 23.8 million euros in share buy-backs by Société BIC at the end of June 2018 (296,932 shares purchased at an average price of 80.04 euros). BIC Corporation had share buy-backs for 0.1 million euros.

Stationery H1 2018 Net Sales decreased by 7.4% as reported and by 0.1% on a comparative basis. Second quarter 2018 Net Sales were down 6.8% as reported and down 1.4% on a comparative basis.

• In Europe, while the market declined 2.2% in value^[6], Net Sales were flat with continued solid performance in Southern Europe (Spain and Turkey) partially offset by negative back-to-school phasing in France (shipment to customers postponed from June to July, versus last year).
• In North America, Net Sales increased mid-single digit with a strong performance in e-commerce, the on-going success of our BIC® Gelocity Quick Dry pen, as well as positive back-to-school phasing. Year-to-date June 2018, BIC outperformed the declining U.S. Stationery market (-0.9%), gaining 0.5 points market share in value^[7].

• In Latin America, Net Sales decreased low-single digit, negatively impacted by the 10-day transportation strike in May in Brazil, combined with on-going inventory adjustments by customers, as well as a negative back-to-school phasing in Mexico.
• Cello Pens Domestic Sales were flat on a comparable basis as Cello continues its product trade-up strategy and portfolio streamlining.

H1 2018 Normalized IFO margin for Stationery was 11.7%, compared to 11.0% in H1 2017 with favorable Sales Mix and cost efficiency, offsetting increasing Raw Material costs.  Q2 2018 Normalized IFO margin was 15.0%, compared to 15.5% in Q2 2017.

H1 2018 Net Sales of Lighters decreased by 11.4% as reported and by 2.6% on a comparative basis. Second quarter 2018 Net Sales were down 11.5% as reported and down 4.5% on a comparative basis.

• Europe Net Sales were flat in H1. In Western Europe, in spite of unchanged market conditions and distribution channels for BIC, performance was impacted by the decision to adjust a part of our route-to-market in traditional networks. In Eastern Europe, we continued to grow market share.
• North American Net Sales decreased slightly in H1. Following pre-buys from retailers in Q1 ahead of the April 1^st price increase, Q2 performance was soft, as expected. The non-refillable pocket lighter market in the US declined by 0.3%^[8].
• In Latin America, Net Sales decreased high-single digit, due to on-going inventory adjustments by customers in Brazil. In addition to this, Brazil's performance was impacted by the 10-day transportation strike in May. Mexico performed well with a positive trend in Q2, driven by enlarged distribution in traditional stores.

H1 2018 Normalized IFO margin for Lighters was 37.1%, compared to 39.3% in H1 2017, reflecting an increase in Raw Materials and Brand Support, as well as unfavorable fixed cost absorption. Q2 2018 Normalized IFO margin was 38.4%, compared to 41.3% in Q2 2017.

H1 2018 Net Sales of Shaver's decreased by 11.8% as reported, and by 3.1% on a constant currency basis. Second quarter 2018 Net Sales decreased by 8.0% as reported and by 0.3% on a constant currency basis.

• The performance was solid in Europe with Net Sales increasing mid-single digit. This was mainly due to continued growth in Eastern Europe, notably in Russia with a market share increase driven by BIC® Flex 3 Hybrid and new distribution gains. Western Europe Net Sales were flat in spite of a declining market (down 1.1% in value, YTD May 2018^[9]) for the one-piece segment.
• In North America, Net Sales decreased mid-single digit, negatively impacted by the on-going market disruption including competitive pressure. BIC underperformed the U.S. one-piece market (down 3.9% in value), losing 0.5 points resulting with 26.4% market share in value (YTD June 2018^[10]), in spite of the continued success of our new products BIC® Soleil® Balance, N°1 new product on the female one-piece market, BIC® Flex 3 Hybrid and BIC® Soleil® Bella Click.
• In Latin America, Net Sales were flat. In Brazil, the impact of the 10-day transportation strike was more than offset by our distribution expansion and market share momentum, while market declined 2.7% in value (YTD May 2018^[11]). BIC gained 2.5 points to reach 21.2% market share in value, driven by BIC® 3 and our latest launches such as BIC® Flex 3 and BIC® Soleil Sensitive.
• In the Middle-East and Africa, Net Sales decreased double-digit with performance negatively impacted by a decrease in promotional activities and current unfavorable importation legislation in North Africa.

H1 2018 Normalized IFO margin for Shaver's was 11.7% compared to 13.1% in H1 2017, driven by low volumes, unfavorable product mix, increase in Raw Material costs partially offset by lower Brand Support compared to last year.
 Q2 2018 Normalized IFO margin was 14.9%, compared to 14.0% in Q2 2017.

H1 2018 Net Sales of Other Products decreased by 28.5% as reported and by -10.4% on a comparative basis. Second quarter 2018 Net Sales decreased by 25.8% as reported and by 6.9% on a comparative basis.

BIC Sport posted a low double-digit decrease in its Net Sales on a comparative basis.

H1 2018 Normalized IFO for Other Products was a negative 1.0 million euros, compared to a negative 1.8 million euros in H1 2017. Q2 2018 Normalized IFO for Other Products was a positive 1.2 million euros, flat vs. last year.

We expect 2018 Group Net Sales to increase between +1 and +3% on a comparative basis, with all categories contributing to the growth. Major factors affecting sales performance could include continued competitive pressures in Shaver, further inventory reductions from retailers, and continued softness in the Brazilian economy.
Gross Profit will be impacted by an increase in raw material costs, higher depreciation, while we will continue to invest in targeted Brand Support and Operating Expenses.
2018 Normalized Income from Operations will also be impacted by sales performance. Based on these factors we expect Normalized Income from Operations margin to be between 17% and 18%.

As of June 30, 2018, the total number of issued shares of SOCIÉTÉ BIC was 46,645,433 shares, representing:

• 68,003,531 voting rights,
• 67,055,750 voting rights excluding shares without voting rights.

Total number of treasury shares held at the end of June 2018: 947,781.

• Constant currency basis: constant currency figures are calculated by translating the current year figures at prior year monthly average exchange rates.
• Organic growth or Comparative basis: at constant currencies and constant perimeter. Figures at constant perimeter exclude the impacts of acquisitions and/or disposals that occurred during the current year and/or during the previous year, until their anniversary date. All Net Sales category comments are made on a comparative basis.
• Gross profit is the margin that the Group realizes after deducting its manufacturing costs.

• Normalized IFO: normalized means excluding non-recurring items as detailed on page 3.
• Normalized IFO margin: Normalized IFO as a percentage of Net Sales.
• Net cash from operating activities: principal revenue-generating activities of the entity and other activities that are not investing or financing activities.
• Net cash position: Cash and cash equivalents + Other current financial assets - Current borrowings - Non-current borrowings (except financial liabilities following IFRS 16 implementation).

SOCIETE BIC consolidated financial statements as of June 30, 2018, were approved by the Board of Directors on July 31, 2018. A presentation related to this announcement is also available on the BIC website (at www.bicworld.com).
This document contains forward-looking statements. Although BIC believes its expectations are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. A description of the risks borne by BIC appears in the section, "Risk Factors" in BIC's 2017 Registration Document filed with the French financial markets authority (AMF) on March 21, 2018.

For more information, please consult the corporate website: www.bicworld.com

BIC is a world leader in stationery, lighters, shavers and promotional products. For more than 70 years, BIC has honored the tradition of providing high-quality, affordable products to consumers everywhere. Through this unwavering dedication and thanks to everyday efforts and investments, BIC has become one of the most recognized brands and is a trademark registered worldwide for identifying BIC products which are sold in more than 160 countries around the world. In 2017, BIC recorded Net Sales of 2,041.4 million euros. The Company is listed on "Euronext Paris" and is part of the SBF120 and CAC Mid 60 indexes. BIC is also part of the following Socially Responsible Investment indexes: CDP's "Leadership Level" (A-) and "Leadership Level" for the additional "Supplier" module, Euronext Vigeo - Eurozone 120, Euronext Vigeo - Europe 120, FTSE4Good indexes, Ethibel Pioneer and Ethibel Excellence Investment Registers, Ethibel Sustainability Index (ESI) Excellence Europe, Stoxx Global ESG Leaders Index.

Societe BIC (EU:BB)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

Societe BIC (EU:BB)
Historical Stock Chart
Von Jul 2023 bis Jul 2024